Property developer pleads poverty
By GARRY SHEERAN – Sunday Star Times | Sunday, 01 February 2009
Property developer Dan McEwan is claiming debts of more than $100 million as he faces sentencing for breaking the Securities Act with two property schemes.
The criminal convictions – two against McEwan personally and a further three against two of his companies – carry maximum fines of $300,000 each.
But his lawyer, Todd Simmons, told the Auckland District Court on Tuesday that after High Court judgements against McEwan for $4 million, the failure of some of his schemes and the liquidation of several of his companies, his only income was a NZ Super pension of $200 a week.
He no longer owned his Herne Bay, Auckland home, and was supporting a partner and a 2 1/2-year-old child.
Assets held in a McEwan family trust 18 months ago had been lost after being assigned to a finance company now in moratorium.
The court heard that McEwan, 70, faced bankruptcy proceedings in the High Court later this month. It also heard, in a report from the Probation Service, that McEwan claimed he was facing debts and personal liabilities of more than $100m.
“The cards have collapsed for McEwan,” said Simmons. “His financial situation is truly hopeless, I am sorry to say.”
But Judge Phillipa Cunningham said she would be surprised if there was not one source of money from a trust or family member that would allow a fine to be paid. “These things are not always straight-forward.”
She said she found it hard to reconcile McEwan’s claims of a hopeless financial situation with the fact that he had successfully completed 17 significant property developments in recent years.
“I need a degree of realism about [these matters],” said Cunningham.
In the event, she allowed McEwan’s counsel more time to establish his ability to pay a fine, as well as whether the failed property development at the heart of the court case “was ever really a runner”.
“It seems to me it was never going to fly, and that goes directly to the issue of culpability,” she said.
With virtually no precedents for McEwan’s convictions for selling investments without a registered prospectus and investment statement to non-habitual investors, and with similar charges likely in the continuing fallout from the property and investment crash, fines imposed on him will establish some precedent.
The prosecution is asking for a $50,000 fine on each charge, with the defence arguing for something closer to $30,000.
The bench also considers issues such as ability to pay, and reparation for victims.
In this instance, the case against McEwan was brought on by a complaint from Dunedin investors Peter and Susan Gale who say they lost around $114,000 in the two failed McEwan projects.
